Correlation Between Auxico Resources and Capella Minerals

Can any of the company-specific risk be diversified away by investing in both Auxico Resources and Capella Minerals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Auxico Resources and Capella Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Auxico Resources Canada and Capella Minerals Limited, you can compare the effects of market volatilities on Auxico Resources and Capella Minerals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Auxico Resources with a short position of Capella Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auxico Resources and Capella Minerals.

Diversification Opportunities for Auxico Resources and Capella Minerals

0.0

Correlation Coefficient

Auxico Resources  Capella Minerals

Pay attention - limited upside

The 3 months correlation between Auxico and Capella is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Auxico Resources Canada and Capella Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capella Minerals and Auxico Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Auxico Resources Canada are associated (or correlated) with Capella Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capella Minerals has no effect on the direction of Auxico Resources i.e., Auxico Resources and Capella Minerals go up and down completely randomly.

Pair Corralation between Auxico Resources and Capella Minerals

If you would invest  2.23  in Capella Minerals Limited on December 29, 2024 and sell it today you would earn a total of  0.63  from holding Capella Minerals Limited or generate 28.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Auxico Resources Canada  vs.  Capella Minerals Limited

Auxico Resources Canada

Risk-Adjusted Performance

Very Weak

Over the last 90 days Auxico Resources Canada has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Auxico Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Capella Minerals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capella Minerals Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Capella Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Auxico Resources and Capella Minerals

The main advantage of trading using opposite Auxico Resources and Capella Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auxico Resources position performs unexpectedly, Capella Minerals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Capella Minerals will offset losses from the drop in Capella Minerals' long position.

The idea behind Auxico Resources Canada and Capella Minerals Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.